As per the recent update, the Good and Service Tax council can increase the GST from 5% to 6% on many essential goods like food, clothes, and shoes. So if you are interested to know the GST rates on fruits and vegetables, then this is the perfect time.
GST on fruits and vegetables can be summarized in one line – Fresh Fruits and vegetables are exempt from Taxation, while Frozen Fruits and vegetables go through taxation. But there are layers in it and to understand it better go through the complete article.
How are Fruits and Vegetables Taxable under GST?
The complete taxation scheme can be divided into 4 parts according to type and source, all four are listed below.
- NIL (0%)
- Taxed at 5%
- Taxed at 12%
- Taxed at 18%
NIL (0%) Rate
All the following comes under NIL Rated Product Under GST:
- All Unprocessed (Fresh) or chilled vegetables along with roots and tubers like Onions, potatoes, tomatoes, garlic, cabbage, cauliflower, carrots, beetroots etc.
- Fresh fruits like Apples, bananas, coconut, cherries, mangoes, peaches, pineapples, guavas, citrus fruits such as mandarins, oranges, grapefruit, etc.
- Fresh nuts such as Walnuts, Almonds, filberts or Hazelnuts, Chestnuts, Macadamia nuts, Pistachios, Kola nuts, Areca nuts
All the above-listed fruits and vegetables have been exempted from GST. It also states that all the fresh/ unprocessed or Chilled fruits and vegetables purchased directly from agriculturist, dealer or retailer are exempted from GST.
5% GST on Fruits and Vegetables
All the following items fall in the 5% GST Slab:
- Herb (Jari booti and dry flower), dry plants and roots, bark are taxed at 5% GST.
- Frozen fruits and vegetables whether they are boiled in water or cooked or uncooked or added sugar and sweetening matter are taxed at 5% GST.
- Shelled or Peeled dried areca nuts.
- Some Provisionally preserved fruits, vegetables, and nuts which are not suitable for immediate consumption.
- Other preserved vegetables
All the above items are taxed at 5% under GST tax slabs, it also means that most of the preserved items come into this slab and taxed at 5% GST.
Fruits and Vegetables Taxed at 12% GST
All the following items taxed at 12% under GST:
- Fruits and Vegetable juices are taxed at 12% under GST.
- Dried or Fresh, peeled or shelled Dry Fruits.
Most of the items are previously taxed at 5% but now they are taxed at 12% Under GST which are also the reason behind the increasing the cost of Dry fruits recently.
Also Read: GST Impact on FMCG Sector
All the following items are taxed at 18% under GST:
- Jellies, Fruit jams, pastes or nut puree are taxed at 12% Under GST.
- Vegetables, Fruits, nuts, food items or plants preserved by sugar, acetic acid, or vinegar.
- Other vegetables (Tomatoes, mushrooms, etc.) which need different preservation methods
These food items are previously taxed at a rate of 5% under various VAT Acts but now they belong to 18% GST slab. Thus the price of these products hiked a lot due to the changes.
Implantation of GST on fruits and vegetables and recent changes in it will impact end consumer and also it will decrease the consumption of products which are previously taxed at 5% but after GST the same is now taxed at 12% or 18%. While the GST turned into a positive step for agricultural industry FMCG Companies got hit by it and consumption of their products decreased rapidly.